One source said RBS, which sold 57.9 percent of its shares to the government last week, had recognized that auctions on foreclosed properties contributed to housing market imbalances by driving prices down, The Times of London reported Monday.

In the third quarter in Britain, 11,300 homes were repossessed, a jump of 12 percent from the second quarter. Some are predicting as many as 100,000 British homes will be repossessed in 2009, well beyond the record of 75,000 set in 1991, The Times said.

The plan represents RBS's second concession to customers since the government took control, The Times said. The bank earlier said it would also not raise overdraft rates until 2010.

RBS is estimated to control 17 percent to 18 percent of the mortgage market in Britain, The Times said.

Last week, investors purchased only 0.24 percent of the shares the bank offered in an attempt to raise capital to meet new requirements. The lack of interest forced the government to step in, The Times said.